Why More Businesses Fail Than Ever Succeed?

To understand how to succeed you need to first understand why so many people fail. If statistics are to be believed, five out of ten businesses fail within their first five years. Of those that are left, additional 50% will fail within the next four years.

These means that if there 500,000 new businesses operating today, there will only be about 125,000 left in nine years. A whopping 375,000 will have either closed down, been liquidated, merged, been acquired, changed direction or become a new business.

The more shocking statistics is that, of the 125,000 remaining businesses, only 15% (that is 18,750) will be making a significant profit. The remaining 106,250 will be barely surviving.



Why does this occur?
It has been discovered that people go out and hastily start their own business with the dream of making their first million. If they are to be honest with you, these people will tell you they started their business to make money and to have a better life. In most cases the dream never eventuates. Most people don’t have and never develop the most basic business and management skills that will ensure their success.

Most people are trained in a technical skill, and they are usually very good at what they do technically. They may be a good lawyer, doctor, stockbroker, builder, salesperson or advertising copywriter, but that particular skill they possess doesn’t qualify them to be a successful businessperson.

Running a business is a specialized technical skill on its own, which must be learned like any other. It is a skill that very few people learn before going into business.

Most people start business by investing all their money setting up and getting everything ready- computers, furniture, fixtures and fittings, letterheads and business cards. In all this planning and activities they have forgotten one essential element: customers- how to attract them and how to keep them.

People realized too late that owning one’s own business means learning a whole new set of business skills. If they don’t act to get those skills soon, the very next step is business failure.